Policy analysis: Prescribing policies

Review Question 8.

Return to Figure 5.2 and consider the following criteria for prescription:

a. Maximize effectiveness at least cost [Note: Be careful—this is a tricky question].

b. Maximize effectiveness at a fixed cost of $10,000.

c. Minimize costs at a fixed-effectiveness level of 4,000 units of service.

d. Achieve a fixed-effectiveness level of 6,000 units of service at a fixed cost of $20,000.

e. Assuming that each unit of service has a market price of $10, maximize net benefits.

f. Again assuming that each unit of service has a market price of $10, maximize the ratio of benefits to costs.

Indicate which of the two main programs (program I and program II) should be selected under each of these criteria, and describe the conditions under which each criterion may be an adequate measure of the achievement of objectives.